Aboitiz Equity Ventures Inc., the holding company of the Aboitiz Group, said Thursday consolidated net income rose 3 percent in the first quarter to P4.8 billion from P4.7 billion a year ago, on lower one-off losses representing net unrealized foreign exchange losses.

“Our diversified portfolio gives us the resilience to sail through varying business cycles. The underlying strength of our core operations and a vibrant economy keep us optimistic on our long-term fundamentals,” AEV president and chief executive Erramon Aboitiz said.

Power accounted for 64 percent of total income contributions, followed by banking and financial services with 30 percent.

Aboitiz Power Corp., the power arm of AEV, saw its net income decline 9 percent in the three-month period to P4 billion from P4.4 billion a year ealier.

The company recognized non-recurring foreign exchange losses on the revaluation of dollar denominated liabilities amounting to P1.2 billion, versus a non-recurring loss of P577 million in the first quarter last year resulting from the movements in the peso-dollar exchange rates.

Aboitiz Power’s core net income in the first quarter amounted to P5.2 billion, up 4 percent from a year ago, without the one-off adjustments.

“Despite the one-off adjustments we had to incur in the quarter, we continue to see modest growth of the group in both our generation and distribution businesses,” Aboitiz Power president and chief operating officer Antonio Moraza said.

Moraza said the company continued to see improvement in plant reliability and availability which resulted in significant financial contributions.

AEV’s banking unit Union Bank of the Philippines increased its first-quarter income contribution by 32 percent from P1.1 billion to P1.4 billion, on higher revenues.

The food business under Pilmico Foods Corp. and its subsidiaries reported a net income of P264 million in the first quarter, or 10 percent lower than P292 million a year earlier.

AEV’s land business Aboitiz Land Inc. and other subsidiaries reported a net income of P59 million in January to March, down 18 percent year-on-year on increased borrowing expenses for the funding of new developments.

Republic Cement’s income contribution to AEV decreased 140 percent to a net loss from a P202 million net income in the first quarter last year, because of higher energy input costs.

MANILA - (UPDATE) Unionbank said Monday it would tap blockchain to connect rural banks in the same way systems such as Bancnet and SWIFT link larger lenders.

Six rural banks will be included in the pilot run, which was approved by the Bangko Sentral ng Pilipinas. With blockchain, the number of steps to complete some transactions will be brought down to 3 from 20, said Unionbank chairman Justo Ortiz.

Blockchain can help "crack the code of financial inclusivity," Ortiz said during the launch of the Blockchain Association of the Philippines.

"The rural banks are the first mile to getting those members of the community that are unbanked," Ortiz said.

Banks will soon find more applications for the blockchain technology, Ortiz said.

Ortiz said Unionbank would triple its blockchain programmer workforce to around 100 by the end of the year from the current 30. The company hopes to grow this to 20,000 in 2 years, he said.

"We need to be able to bring people from abroad to basically up the game here at the enterprise level. At the end of the day, if the enterprises adopt, it will force the individuals to adopt. It's chicken and egg," he said.

Ortiz also chairs the Blockchain Association of the Philippines which will be formally launched on May 28. He said he hoped the industry would soon overcome birth pains.

"Eventually it becomes easy. We now have everything that you do on internet today," he said.

Union Bank of the Philippines, the country’s ninth-largest lender in terms of assets and controlled by the Aboitiz Group, said net income increased 8 percent in the first half to P4.7 billion from P4.4 billion a year ago.

UnionBank said in a disclosure to the stock exchange Monday net revenues grew 9.1 percent in the six-month period to P12.7 billion from P11.7 billion in the same period last year.

The figures translated into an annualized return on equity and return on average assets of 12.8 percent and 1.6 percent, respectively.

“We are ahead of our target for the year despite margin compression in the first half due to higher interest rates and regulatory compliance,” said UnionBank treasurer and chief financial officer Jose Emmanuel Hilado.

He said for the rest of the year, recurring income was expected to drive profitability. “We anticipate margins to improve as loan rates start to catch up against deposit cost,” he said.

The bank sustained its robust performance from the first quarter given the double-digit growth from customer businesses. Total loans climbed 18 percent year-on-year to P313.0 billion, with retail loans accounting for 33 percent of the total loan portfolio.

This boosted the bank’s total assets to P623.2 billion, up by 12.8 percent from P552.6 billion in the same period last year. Assets were mainly supported by deposits at P452.9 billion.

UnionBank president Edwin Bautista said the bank would launch more innovations in the industry as it aimed to be among the pioneers in the field of blockchain technology and the token economy.

“We have no doubt that we are on track in our digital transformation journey. The market has noticed. The bank was recognized as Asia’s Best Bank Digital Transformation in the 2018 Euromoney Awards for Excellence. Moreover, our Project i2i in collaboration with rural banks was highlighted in the technology space as a commendable use case of blockchain to drive societal change and inclusive prosperity,” he said.

Bautista expressed optimism the bank would be able to continue growing in the succeeding quarters, citing the robust economy that could also benefit the banking industry.

UnionBank has consistently been recognized as one of Asia’s leading companies in banking and finance, ranking among the Philippines’ top 10 universal banks in terms of key performance ratios in profitability, liquidity, solvency, and efficiency.

UnionBank garnered several awards and recognitions including ‘Asia’s Best Bank Transformation’ in the 2018 Euromoney Awards for Excellence.

UNION BANK of the Philippines, Inc. expects its loan portfolio growth to accelerate further in the third quarter after it resolved issues on credit for teachers.

On the sidelines of Philippine Investment Summit in Taguig City, UnionBank President and Chief Executive Officer Edwin R. Bautista said the Aboitiz-led bank expects its loan growth to pick up this quarter.

“Our loans are still growing by 15-16%. It will accelerate in the third quarter because now we are able to book teachers loans, which was a big portion of our consumer loans,” Mr. Bautista told reporters on Wednesday.

Mr. Bautista explained that the lender was unable to issue loans for teachers for six months due to processing issues with the Department of Education (DepEd).

“Most of us who lend to teachers were hit by the delay in the DepEd processing. So for six months, we were not in effect granting loans,” Mr. Bautista said. “That’s been addressed now. It’s now flowing, our [net interest margin] will come back.”

Despite logging a lower net income in the second quarter, Mr. Bautista is confident that the bank’s full-year result will be better than the 2017 level.

“We don’t give profit guidance, but let me assure it will be higher than last year,” he said. “Actually, our income year-to-date is higher than our budget because of the way we design our budget.”

In the second quarter, UnionBank saw its net income decline 17.2% to P1.78 billion from P2.15 billion in the same period last year.

The bank’s other income came in at P1.6 billion, down 13% from a year earlier as service charges, fees and commissions fell 27.5% year-on-year to P818.85 million.

Still, UnionBank’s net profit in the six months to June was up 8% from a year ago at P4.72 billion.

Lawrence Agcaoili (The Philippine Star) - August 30, 2018 - 12:00am
MANILA, Philippines — Aboitiz-led Union Bank of the Philippines has finalized the terms of its stock rights offer from which it intends to raise as much as P10 billion to fund majority of the projected loan availments as well as other other business growth.

The bank is set to sell 158.8 million common shares to existing shareholders at P62.97 per share. Existing shareholders will be entitled to one rights share for every 6.6644 common shares held.

The fund raising activity will start Sept. 10 and end on Sept. 21.

“The bank aims to raise approximately P10 billion through the stock rights offering, which will be used to fund a majority of the projected loan availments from the bank for the remainder of 2018, as well as for general purposes and to fund other business growth,” UnionBank said.

Aboitiz Equity Ventures (AEV), the Insular Life Assurance Co. Ltd., and Social Security System (SSS) not only agreed to subscribe for at least entitlement shares but also committed to acquire remaining rights shares unsubscribed to make sure the offering is fully subscribed.

AEV is the single biggest shareholder of UnionBank with 49.12 percent. Other major shareholders are Insular Life and SSS.

Last October, the bank launched a P70 billion funding program consisting of offshore borrowings as well as domestic borrowings through the stock rights offering, issuance of long term negotiable certificates of deposits (LNTCDs), among others.

UnionBank has so far raised half of its $1 billion medium term note program successfully tapping $500 million last November.

UnionBank raised P3 billion last February from the first tranche of its P20-billion LNTCD offering to improve the bank’s debt maturity profile and help grow its business portfolio.

Union Bank of the Philippines’ (UnionBank) net profit decreased by 4.6 percent to P6.1 billion in the first nine months of 2018 from P6.4 billion in the same period last year.

In a statement on Monday, UnionBank Treasurer and Chief Finance Officer Jose Emmanuel Hilado blamed the drop on the “rise in interest rates and the absence of new loan releases to teachers have affected our margins.”

Monetary authorities have raised key interest rates by a total of 150 basis points beginning in May.

Its earnings performance translated to an annualized return on equity and return on average assets of 11.0 percent and 1.3 percent, respectively.

The lender said it sustained double-digit growth on its customer businesses, while total loans grew by 18.6 percent year-on-year to P315.3 billion, with retail loans accounting for 33 percent of total loan portfolio.

“This boosted the bank’s total assets to grow by 17.0 percent year-on-year to reach P643.0 billion from P594.4 billion in the same period a year ago,” it added.

Assets were mainly supported by deposits at P441.4 billion.

According to Hilado, UnionBank expects its margins to improve as assets reprice and after its subsidiary City Savings’ access to the Department of Education’s automatic payroll deduction system has been resolved.